Steve Winterflood: Is Northamptonshire the first domino?

The county council’s troubles are well documented, but is it the first in a line of local authorities set to fall? Steve Winterflood argues that doing the “boring really well” is no longer enough if councils want to avoid a similar fate.

The best value inspection report of Northamptonshire County Council published in March was, to say the least, damning. An earlier report by the Local Government Association’s peer review team was also far from flattering. But is Northamptonshire’s parlous state due to its own incompetence or is it a portent of things to come?

In February 2018 the council’s external auditors, KPMG, issued an advisory notice under Section 29 and Schedule 8 of the Local Audit and Accountability Act, 2014, essentially for four reasons:

Flexible use of capital receipts

Reliance on one-off use of resources

Failure to deliver savings plans

Ensuring sustainable financial decisions are taken

The best value (BV) inspection team, quite rightly, relied heavily on the concerns of KPMG in reaching their conclusions, as did the Local Government Association (LGA) report. But surely there is more. Northamptonshire’s problems did not happen overnight.

The question for me is not what happened in terms of the financial situation but why it happened. And having understood “the why” can we reach any wider conclusions on the state of local government? Or, is Northamptonshire simply a sloppy, squandering council as variously described in the BV report?

Next generation

In addition to the concerns raised by KPMG, the BV report takes forward the LGA report’s concern that “the council has a poor record of delivering its approved budget”.

There is a strong implication in the BV report that all was well in Northamptonshire before 2013 when Ofsted published an inspection report which resulted in an “inadequate judgement”.

According to the BV inspection, the county council then “lost tight budgetary control” and instead adopted a new model called Next Generation, which focussed on future arrangements and structures for the delivery of services over the longer term.

It is far from obvious — even from the most cursory view of the council’s budgets before 2013 — that tight controls did exist, at least in terms of the levels of overspend.

Of special note concerning Northamptonshire is that it has consistently levied the lowest county precept in England while having the fastest growing tax base of any county council.

But the BV report concludes that both observations are largely irrelevant. In terms of the precept, it was clearly a local political decision that the county should have the lowest level for any county council in England, and this has been the case since at least 2005.

It is an unfortunate fact of central and local government relations that the earlier county-level decision cannot now be reconsidered because of the “capping regime” (referendums aside).

It has also been the case for over 70 years that local authorities, unlike many other local democracies across the world, have no control over the setting of the local tax base. I do not believe either of these observations to be irrelevant.

The Next Generation initiative seems to me to be largely dismissed by the BV report. A telling sentence at the start of the report notes: “In local government there is no substitute for doing boring really well. Only when you have a solid foundation can you innovate.”

Both the LGA and BV reports conclude that there was insufficient “buy-in” for the Next Generation initiative, and I think this is the most critical observation of both reports.

Doing the “boring really well” is no longer sufficient to guarantee the survival of individual councils. The reduced funding since 2010 is well documented. The fact that local authorities have fewer resources does not diminish demands for better services, and the fact that, by and large, these demands are being met is testament to the determination and innovation of the service.

Dominoes, culture & central government

And this brings me to two conclusions. The first point is to determine if Northamptonshire is only the first domino of many to fall, or is it a one-off?

The answer for me is unknown. What I do know, however, is that if other authorities are to avoid a similar experience two things need to happen.

The first is that local authorities facing such a crisis cannot just stick to “doing the boring really well” and expect to thrive. A change in culture must take place with buy-in across the organisation to ensure savings are delivered and an approach adopted that is relevant to the future, not just the past.

Secondly, more diktats by central government for local government is not the answer; rather, it is the cause of the problem.

The “irrelevant” concerns of both the local tax base and rate are but two examples of many whereby taking authority away from councils undermines their ability to thrive and adapt to changing circumstances.

Steve Winterflood

Steve Winterflood is a PhD student at INLOGOV researching measures of local government authority and is a former chief executive of South Staffordshire Council.

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